All taxes are immoral

William Hague has hit exactly the right note on taxation. Pleas for lower taxes have been derided as "simply greed" by those who prefer to spend other people's money. By basing his case on the moral ground, Hague has opened up a clear gulf between his party and New Labour. What he offers is an alternative vision of the relationship between the individual and the government, a more equal relationship, and one which promotes moral growth.

The chancellor's preference for stealth taxes turned out to bring only a temporary reprieve from public disquiet. We now know that the average taxpayer is £1,500 worse off each year, a rise of 2.5%. Brown denies this, assuming that all growth belongs to him, rather than to those who made it. His plea that company taxes should be excluded rather reminds one of Marion Barry, when Washington's mayor, claiming that his city actually had a low crime rate "if you didn't count the murders".

Of course company taxes fall on people. They pay the higher prices which taxes bring about, and they achieve less return on their investment. Whether the taxes are levied directly on people, or by stealth, the effect is the same. People have less to spend themselves because government is spending more of it instead.

Herein lies the immorality of taxation. Taxation means compulsion. Our habit of clothing it in fine words often conceals the brute fact that taxation is the confiscation of our property by people who prefer to spend it on their priorities rather than ours. Higher taxation means more compulsion. It forces further retreat by individuals from the area of their lives in which they can make decisions and assume responsibilities.

At the heart of the debate is the question of whether people are to live by their own values as adult citizens, or made to live according to the values of their government. Hague has opted for the former, and holds out the prospect of a more equal relationship in which citizens meet the government eye to eye and freely contract with it to discharge their obligations.

The United States has just seen its annual list of the top 100 lifetime benefactors. In the number one slot is George Soros, who has given away $2.65bn. The list includes Bill and Melinda Gates, rapidly making their way up its ranks, and even the actor Paul Newman, whose supermarket sauces pay every penny to charity. The US can be generous with its private charity because government leaves space for its citizens to do so. It takes 28% of their income each year, as against the 40% which our own treasury takes. Further, US tax laws allow full deduction for charitable gifts. This helps to explain why we give £7 a month, versus the equivalent of £17 given by Americans.

It is not just charity which is crowded out by the state. Whenever it undertakes a responsibility, it denies us the chance to assume it. If people are less inclined to care for their elderly relatives than before, it is because the state has convinced them that it is its job, not theirs. If people do not save enough to meet their future needs, it is because the state has spent decades telling them that it will take care of them instead.

Wherever government has advanced, individual responsibility has retreated. Now Hague is telling us it can be rolled back for moral reasons, to create a space in which people can grow. His guarantees are spot on.

By pledging that the overall tax burden will diminish, he tells us that we will undertake responsibility for a larger part of our lives. We will have the resources to make better provision for our relatives and for own own future. We will have the means to contribute to charitable causes, and to support those less fortunate than ourselves.

By pledging an end to stealth taxes, he is telling us that he intends to take away some of the cynicism and dishonesty which discredit government. If we are to pay taxes, he says, let them be open and understood and accepted. Gordon Brown has made it his style to rack up taxes by keeping them concealed and keeping taxpayers confused. William Hague plans to expose taxation, probably in the belief that if people know what they are paying, they will be less tolerant of the high tax culture, and the arrogant assumption that it will plan and organise our lives better than we can do it ourselves.